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F10 / F11 (2011 - Current)
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  #1  
Old 05-13-2015, 06:45 AM
amarmistry amarmistry is offline
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Trade In/Trade Down

Has anyone done a Trade-In where they bought a car from a dealer that is priced lower than the car they are trading it in? How does this normally work?
I am not sure yet, but I am thinking of either selling my 2013 5-Series or trade it in and get something less expensive.

Any feedback/suggestions/comments would be helpful.

If this is not the right place for this thread, please do say so.

Thanks!
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  #2  
Old 05-13-2015, 06:51 AM
The X Men The X Men is offline
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We traded in a Lexus RX450h for a less expensive BMW 328i a few years ago. We still had a loan balance on the Lexus, so there was no refund. I would imagine if your BMW is paid off, then the dealer will give you a refund check for the difference. If your state has a sale tax credit for trade in like MA, that will be a wash, no refund for the sale tax credit.
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  #3  
Old 05-13-2015, 06:55 AM
amarmistry amarmistry is offline
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Yes, the car is paid off.
Just wondering how the dealer would calculate the difference. Would they be willing to give you less for your trade if you were buying lesser expensive car vs more expensive?
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  #4  
Old 05-13-2015, 07:08 AM
The X Men The X Men is offline
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Quote:
Originally Posted by amarmistry View Post
Yes, the car is paid off.
Just wondering how the dealer would calculate the difference. Would they be willing to give you less for your trade if you were buying lesser expensive car vs more expensive?
Rather your new car cost more less, it really shouldn't matter, they should give you what they think the car will sell for minus $4000 or $5000 or so. Another option is to sell the car yourself or get a quote from CarMax.
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  #5  
Old 05-13-2015, 02:02 PM
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Eagle11 Eagle11 is offline
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Quote:
Originally Posted by amarmistry View Post
Yes, the car is paid off.
Just wondering how the dealer would calculate the difference. Would they be willing to give you less for your trade if you were buying lesser expensive car vs more expensive?
really?


Have you thought about doing some leg work to see what your car is worth before going to the dealer?
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  #6  
Old 05-13-2015, 05:24 PM
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ae86pwr ae86pwr is offline
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Keep the trade-in and new car separate transactions.

Shop around to sell your trade-in. Get your baseline from Carmax (or any used car superstore) then see if your dealer will beat or match the offer.
Then you go shopping for new with check in hand.

If you blend the deal ... then you open up gray area.....
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  #7  
Old 05-13-2015, 05:37 PM
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Sonicendeavor Sonicendeavor is offline
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Quote:
Originally Posted by ae86pwr View Post
keep the trade-in and new car separate transactions.

Shop around to sell your trade-in. Get your baseline from carmax (or any used car superstore) then see if your dealer will beat or match the offer.
Then you go shopping for new with check in hand.

If you blend the deal ... Then you open up gray area.....
+1000
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  #8  
Old 05-13-2015, 06:57 PM
madhotm3 madhotm3 is offline
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Quote:
Originally Posted by ae86pwr View Post
Keep the trade-in and new car separate transactions.

Shop around to sell your trade-in. Get your baseline from Carmax (or any used car superstore) then see if your dealer will beat or match the offer.
Then you go shopping for new with check in hand.

If you blend the deal ... then you open up gray area.....

+1
I'll add that as long as you do your homework there is nothing wrong with making the deal under one transaction.
I typically make the deal on the purchase before letting the dealer know that I have a trade-in. Once the deal on the new purchase/lease is worked out, I hit them with the trade-in info. I know what the reasonable value is so it's easy at this point. Eliminates the gray area mentioned above.

The dealer will simply cut you a check for the difference.
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  #9  
Old 05-14-2015, 06:11 AM
The X Men The X Men is offline
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Quote:
Originally Posted by madhotm3 View Post
+1
I'll add that as long as you do your homework there is nothing wrong with making the deal under one transaction.
I typically make the deal on the purchase before letting the dealer know that I have a trade-in. Once the deal on the new purchase/lease is worked out, I hit them with the trade-in info. I know what the reasonable value is so it's easy at this point. Eliminates the gray area mentioned above.

The dealer will simply cut you a check for the difference.
I do the same thing, make the new car and the trade one transaction and negotiate on the difference of the two prices. Sometimes that actually works out better because the dealer will give you a bit more for the trade in just to get you to buy the new car. If I do not get my differential number, I walk out on both the new car and the trade. Most dealership will try to play with numbers, give you a bit more discount for the new car and less on the trade in or vice versa. You can eliminate that by negotiating just one differential number, make sure you know what that number is before you go into the dealer.
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  #10  
Old 05-14-2015, 09:04 AM
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WilliCO WilliCO is offline
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As I understand it, dealers make most of their money buying trades, not selling cars. Even in our age of total cost transparency on new cars, there's still a certain amount of voodoo on used car pricing. The best way to arm yourself against voodoo is to have options. So I agree - take the car to Carmax for an appraisal first. It's free, takes an hour, and I've talked to a few people who were surprised by the offer Carmax made them.
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  #11  
Old 05-14-2015, 10:00 AM
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550newbie 550newbie is offline
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I have traded in cars that were worth more than the new vehicle and the Dealer just writes a check for the difference. There's another advantage to trading in your old car where you purchase the new one, you will only pay sales tax on the difference of the values. Example: if your trade in is worth $25,000 and the new vehicle sells for $30,000 you will only pay sales tax on $5,000. If you sell your existing car somewhere else, you will pay the sales tax on the entire amount of the new car.

Do what ae86pwr says, get an appraisal from CarMax. It's free and doesn't take much time. Their quote will be on the "low end" of spectrum but at least you'll have a figure when you get to the new car location. Also, when the new car salesperson asks about a trade-in, tell then that you haven't decided yet and to just focus on the "new car" transaction for now. Once you feel like you have finished negotiations on the new vehicle's price, then ask them to work on the trade-in. You definitely want to keep them as separate transactions. I would encourage you to also know (ahead of time) what interest rate you qualify for from your bank and/or credit union.

Let's face it, the salesperson is attempting to make a profit in four areas: new car sale price, trade-in value, finance rate and warranties/extras (window tint, pin striping, under coating - lol, etc.).
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  #12  
Old 05-15-2015, 02:06 PM
amarmistry amarmistry is offline
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All: thanks for the valuable input. I think I will get the CarMax value and use that for my baseline. And yes I have done research about the trade-in value, provate party selling cost for the exact same model and color.
I will keep posting any update on. As some of you may have noticed I have another thread going on about the tires and wheel alignment.
So my question: Is it more valueable to to put the new tires and then sell it or leave the old tires as is and opt for slightly lower value? I have about 40500 miles on the car and tires are almost ready to be replaced.
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  #13  
Old 05-16-2015, 06:17 AM
The X Men The X Men is offline
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Let the other party worry about the tires. If you trade in the car, its cheaper for the dealer to replace it since the dealer's cost for the tire and labor is less.
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  #14  
Old 05-16-2015, 07:27 AM
madhotm3 madhotm3 is offline
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think about it this way - you will spend say, $1000 on new tires.
Do you think the value of the car will increase by $1000+?
The answer is no.
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